Service enablement services (SES), the software layer between the network and vertical applications, are set to become a key differentiator in the machine-to-machine (M2M) market and achieve a total market value of $2.2 billion worldwide by 2014, up from a modest $350 million in 2011, according to the latest study by analyst firm Beecham Research[2].

Such services map to a layer above network airtime connectivity and below end-user value added services such as fleet management[3] and security alarm services. To date, one of the barriers that have slowed growth of the M2M market is the current need to reinvent many of these enabling services as new applications are designed. If, instead, they are provided as part of an SES platform, this can substantially speed market introduction of new end user services, resulting in faster revenue growth, and make the whole process more cost efficient, resulting in cost reduction, says Beecham Research (London).

"We see the revenue opportunity for these services - small now in comparison with network revenue - growing at more than twice the rate of network revenue over the next few years. In doing so, it will also help to drive market development at the end-user service level," says Robin Duke-Woolley, CEO of Beecham Research. "This is a rapidly-moving area. We have now looked at more than 60 platforms being offered in the M2M market, up from about 20 in our first study just 18 months ago, and we know of more coming soon. However, the challenge of interoperability and standardization among so many different offerings remains. We expect to see a significant amount of platform innovation and corporate partnering activities over the coming one to two years."

The nine-month study surveyed more than 200 companies that are in the process of adding M2M capabilities to their products and services. These companies are also some of the early adopters of SES. The survey includes businesses in seven key vertical markets in order to identify requirements and revenue prospects in each sector.

Findings include definitions for more than 110 service elements either being offered now, or likely to be soon; an assessment of key market players and how the competitive landscape is likely to develop, as well as the most promising segments for strong revenue growth.

The report addresses several strategic issues facing SES providers and adopters including: potential revenue opportunities based on a variety of service bundles offered by key players; possible routes to market, and charging frameworks for SES offerings.